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Tether price manipulation

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Re: Tether price manipulation

#121
post #8

While I don’t doubt that Tether was used to manipulate the Bitcoin price upwards, at the same time I believe Bitcoin Futures were/are being used to suppress the Bitcoin price as well. ——— [0]: https://www.equities.com/news/how-do-bitcoin-futures-affect-...

"Suppress" is not the right word because that would imply that the price is wrong. There is nothing wrong with shorting a market. If the short is wrong, she loses money. The market remains balanced and often short squeezes are responsible for large bull runs. Tether however isn't balanced. There is no risk. There is no offsetting liability in the market for the Tether they create (unlike with a short future, which ha…

But banks have been in the wrong in how they used futures to suppress prices of precious metals like gold. A quote from the linked article:

> Precious metals markets have long since been subject to manipulation by large banks. Several banks have admitted wrongdoing and faced fines for manipulating gold prices. Many believe that the prices of gold and silver have been kept artificially low through the use of leveraged paper contracts.

>Dr. Paul Craig Roberts, the former economic advisor for the Reagan administration, has written extensively about this subject.

>In his view, some of the biggest banks in the world have been working to suppress the price of gold in Western markets for many years. They accomplish this through creating so-called “naked shorts” out of thin air (the term vapor contract term we’ve been using is analogous to a naked short).

>A naked short is simply a contract that allows an institution to place a sell order for a particular asset without having any ownership of the asset.

>In other words, it allows a bank to flood the market with fake sell orders, creating downward market pressure. Given that banks can create these shorts to the moon without any accountability, they can keep the price down at a level more or less of their choosing for quite some time.

Especially the last alinea seems to reflect some of the things you said about Tether actually.

Re: Tether price manipulation

#122
post #115
post #97

Earlier quoted context omitted.

Plenty of companies redeem USDT for USD. I myself worked at a company that redeemed billions of dollars. The FUD on HN is approaching delusional levels.

https://tether.to/faqs/ > Unfortunately, Tether has decided to stop serving U.S. individual and corporate customers altogether. As of January 1, 2018, no issuance or redeeming services will be available to these users. Exceptions to these provisions may be made by Tether, in its sole discretion, for entities that are: Established or organized outside of the United States or its territorial or insular possessions; and…

Yes, I worked at a company that had an entity outside the US that minted and redeemed tethers. This is how it works.

Re: Tether price manipulation

#123

The problem is that in the early days of @Bitfinex'ed this was all a bit of a sideshow because there was genuinely large interest from retail and the outcome of crypto was far less certain. However three years on, crypto still does not have a "killer app" and is 99.99% used for speculation. Bitcoin's narrative has had to morph from "digital currency" to "digital gold". But in the depths of the March panic, Tether jum…

The killer app for Bitcoin is escaping government fiat money that is backed by literally nothing at all and is being printed at increasingly alarming rates. 40% of all USD ever created were “made” in 2020. That will have repercussions for decades and isn’t a currency I want to stay in. https://fred.stlouisfed.org/series/M1 Ironically (or not) Bitcoin was created in 2009 right when that graph gets really crazy.

That only works when people take payment in BTC without translating the value provided back to a Fiat currency.

Until that time, expansion of the USD (or other Fiat) supply impacts the "value" that BTC has.

Re: Tether price manipulation

#124

I still don't quite understand how they can manipulate the price. The price of a USDT is 1 dollar. They give out new USDT for $1 a piece. Sure, they may be spending these dollars elsewhere, thus holding a fractional reserve. Sure this may illegal and get them in trouble. But this doesn't effect the dollar value for which these USDT's and thus Bitcoins are traded. As long as a USDT is $1, nobody is manipulating the pr…

> The price of a USDT is 1 dollar. They give out new USDT for $1 a piece.

That's circular logic isn't it? USDT is $1 USD and $1 USD is 1 USDT, therefore it is "stable".

That sentence in and of itself is meaningless.

Re: Tether price manipulation

#125
post #94

Earlier quoted context omitted.

It definitely has a killer app. Probably not a big enough app to justify these prices, but one nonetheless. As Stripe, PayPal, Visa, Gofundme, Patreon, et. al. shut down avenues of payments for legal, but unpopular purchases, BTC is the obvious workaround. Vendors of firearms, pornography, legal funds for unpopular causes, dissident content creators, etc have become increasingly estranged from the "normal" payments m…

If BTCs killer app is criminal transactions, then regulation is guaranteed.

> Vendors of firearms, pornography, legal funds for unpopular causes, dissident content creators

Neither pornography, nor legal funds for unpopular cause (think WikiLeaks), or dissident creators are criminal. At least not in the US or Europe. But they are still blocked by the main payment processing companies.

Re: Tether price manipulation

#126
post #75
post #65

Earlier quoted context omitted.

The thing I don't understand about the "Illegit" method is that it relies on people accepting USDT for BTC and then not cashing them out to real USD. Because if the company is printing USDT it wouldn't have the cash to pay the people trying to cash out USDT. So to allow this to happen you would need a people to be holding a huge amount of USDT.

People do hold USDT. I hold some myself. If you are going to buy crypto again it saves the hassle and expense of converting into fiat money and back again. The majority of exchanges can't actually hold fiat money due to regulatory issues. Also I imagine some people are hoping to avoid the taxman by keeping it in crypto though that's legally not kosher.

Why USDT and not USDC or DAI? Don't you feel like holding USDT makes you complicit in whatever shit is going on?

Also, I would be very, very weary of using an centralized exchange that "can not hold fiat". With the layer-2 projects that are coming now (take a look at loopring or Stakenet), you can transact as much as you want, no gas fees and exchange fees are about the same as any CEX.

Re: Tether price manipulation

#127
post #78

Earlier quoted context omitted.

It’s not individuals buying Tether from Bitfinex and then buying Bitcoin that causes this. It is Bitfinex as an organization ‘printing’ free money and using it to pump the market.

Nonsense. If this were the case then tether could not trade at par.

[deleted]

Re: Tether price manipulation

#128
post #97

Earlier quoted context omitted.

You can’t redeem Tether — that’s a core part of the fraud, they have “banking issues” and had them for years. You can sell it on an exchange but the Tether organisation have prevented any redemption of USD from USDT for years. Anybody turning USDT into USD is selling their USDT.

Plenty of companies redeem USDT for USD. I myself worked at a company that redeemed billions of dollars. The FUD on HN is approaching delusional levels.

And what does the company do with those USDT? If the money printing theory is correct, companies like yours would be the ones counteracting any sell-pressure on USDT. If the theory is not correct, companies like yours would see an at least equal buy-side demand for USDT, bringing real USD into the system.

I mean, does the company hold (increasingly?) large USDT positions on their balance sheet (and would therefore be the ones in the hole if Tether loses the peg), or is the company able to get actual dollars out of Tether inc. in exchange for those tokens?

Re: Tether price manipulation

#129
post #89
post #81

Let's say you believe that Tether is a complete fraud and will crash the market at some point. How do you take advantage of this? I'm not myself trading, but I would be interested to know how that kind of short works in practice. From what I understand, that's what bitcoin futures can be used for?

Cboe ended their bitcoin futures. As such there’s no way to bet on a bitcoin collapse that I know of, in a less risky options-like way. Shorts (if they exist) would be extremely risky, as you owe more if bitcoin rises.

CME Group still offers Bitcoin futures, along with options: https://www.cmegroup.com/trading/bitcoin-futures.html

Re: Tether price manipulation

#130
post #4

I agree that a Tether reckoning is coming, but point #10 of that thread is the most important: it could be weeks, months or _years_ before it's fully corrected, so be super super super careful about using Tether as a reason to short Bitcoin... "The market can remain irrational longer than you can remain solvent"

It's even worse than that. Shorting TSLA is dangerous because of the above. But it's mitigated by people purchasing shares with real fiat. They have a natural incentive to not be absurd: whether or not $800/share is absurd is a matter of opinion...but everyone would agree that $1m/share is absurd. Tether has no such limitation. All the exchanges are complicit in this, wash trading is rampant, and there's an de facto…

If they provide documents January 15th, I would expect at least a few weeks before we get some information. That will be interesting to follow.
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